Edge v. Brice

• Decision Date: 06 March 1962
• Docket Number: No. 50524,50524
• Citation: 113 N.W.2d 755,253 Iowa 710
• Parties: J. W. EDGE and Motor Club of Iowa, an Iowa Corporation, Appellants, v. Robert L. BRICE, Harold J. Teachout, William N. Nicholas, Jo S. Stong, and Harry J. Bradley, Jr., as Members of the State Highway Commission of the State of Iowa, and the State Highway Commission of the State of Iowa: Quentin J. Love, Auditor of the State Highway Commission; Glenn D. Sarsfield, State Comptroller of the State of Iowa; and M. L. Abrahamson, Treasurer of the State of Iowa, Appellees, Board of Water Works of the City of Des Moines, Iowa, Intervenor, Northern Natural Gas Company, Intervenor, Northwestern Bell Telephone Company, Intervenor.
• Court: Iowa Supreme Court

Page 755

113 N.W.2d 755

253 Iowa 710

J. W. EDGE and Motor Club of Iowa, an Iowa Corporation, Appellants, v. Robert L. BRICE, Harold J. Teachout, William N. Nicholas, Jo S. Stong, and Harry J. Bradley, Jr., as Members of the State Highway Commission of the State of Iowa, and the State Highway Commission of the State of Iowa: Quentin J. Love, Auditor of the State Highway Commission; Glenn D. Sarsfield, State Comptroller of the State of Iowa; and M. L. Abrahamson, Treasurer of the State of Iowa, Appellees, Board of Water Works of the City of Des Moines, Iowa, Intervenor, Northern Natural Gas Company, Intervenor, Northwestern Bell Telephone Company, Intervenor.

No. 50524.

Supreme Court of Iowa.

March 6, 1962.

Lambach, Shorey & Plath, Davenport, for appellants.

James E. Thomson, Ames, for appellee Iowa State Highway Commission.

Dickinson, Throckmorton, Parker, Mannheimer & Raife, by Robert B. Throckmorton and John R. Mackaman, Des Moines, for intervenor Board of Water Works Trustees of City of Des Moines.

Smith, Peterson, Beckman & Willson, Council Bluffs, for intervenor Northern Natural Gas Co.

William F. McFarlin, Des Moines, and Clark & Clark, Ames, for intervenor Northwestern Bell Tel. Co.

THORNTON, Justice.

Plaintiffs bring this action as taxpayers seeking a declaration chapter 205 of the Acts of the 58th General Assembly I.C.A. § 306A.10 et seq., is unconstitutional and to restrain defendant highway commission from making reimbursements under chapter 205. Three public utilities have intervened. The trial court held chapter 205 constitutional and dismissed plaintiffs' petition. They appeal.

This case finds its origin in the federal interstate highway program. This program instituted by the Congress will, when completed, include 41,000 miles of super highways connecting all principal cities. This will not only be of benefit to the motoring public, but to the public generally by providing greater transportation facilities and aiding national defense.

The federal statute pertinent here is 23 U.S.C.A. § 123 as follows:

'Relocation of Utility Facilities.

'(a) When a State shall pay for the cost of relocation of utility facilities necessitated by the construction of a project on the Federal-aid primary or secondary systems or on the Interstate System, including extensions thereof within urban areas, Federal funds may be used to reimburse the State for such cost in the same proportion as Federal funds are expended on the project. Federal funds shall not be used to reimburse the State under this section when the payment to the utility violates the law of the State or violates a legal contract between the utility and the State. Such reimbursement shall be made only after evidence satisfactory to the Secretary shall have been presented to him substantiating the fact that the State has paid such cost from its own funds with respect to Federal-aid highway projects for which Federal funds are obligated subsequent to April 16, 1958, for work, including relocation of utility facilities.

'(b) The term 'utility', for the purposes of this section, shall include publicly, privately, and cooperatively owned utilities.

'(c) The term 'cost of relocation', for the purposes of this section, shall include the entire amount paid by such utility properly attributable to such relocation after deducting therefrom any increase in the value of the new facility and any salvage value derived from the old facility. Added Pub. L. 85-767, § 1, Aug. 27, 1958, 72 Stat. 900.'

Chapter 205 of the Acts of the 58th General Assembly, claimed to be unconstitutional, is as follows:

'Relocation of Utility Facilities.

'AN ACT to provide for reimbursement to utilities for nonbetterment costs associated with relocation of facilities occasioned by the federal system of interstate highway and freeway projects.

'Be It Enacted by the General Assembly of the State of Iowa:

'SECTION 1. Whenever the Iowa state highway commission shall determine that relocation or removal of any utility facility now located in, over, along, or under any highway or street, is necessitated by the construction of a project on routes of the national system of interstate and defense highways including extensions within cities and towns, the utility owning or operating such facility shall relocate or remove the same in accordance with statutory notice. The costs of relocation or removal, including the costs of installation in a new location, shall be ascertained by the Iowa state highway commission or as determined in condemnation proceedings for such purposes and paid by the state out of the primary road fund as part of the cost of such federally-aided project.

'SEC. 2. Cost of relocation or removal shall included the entire amount paid by such utility properly attributable to such relocation or removal except the cost of land or any rights or interest in land, after deducting therefrom any increase in the value of the new facility and any salvage value derived from the old facility.

'SEC. 3. No reimbursement shall be made for any relocation or removal of facilities under this Act unless funds to be provided by federal aid amount to at least ninety (90) percent of each reimbursement payment.

'SEC. 4. The term 'utility' shall include all privately, publicly, municipally or cooperatively owned systems for supplying water, sewer, electric lights, street lights and traffic lights, gas, power, telegraph, telephone, transit, pipe line, heating plants, railroads and bridges, or the like service to the public or any part thereof if such system be authorized by law to use the streets or highways for the location of its facilities.'

The sections of the Iowa Constitution, I.C.A., claimed violated are:

'Article VII. SECTION 1. The credit of the State shall not, in any manner, be given or loaned to, or in aid of, any individual, association, or corporation; and the State shall never assume, or become responsible for, the debts or liabilities of any individual, association, or corporation, unless incurred in time of war for the benefit of the State.'

'Article VIII. SECTION 3. The State shall not become a stockholder in any corporation, nor shall it assume or pay the debt or liability of any corporation, unless incurred in time of war for the benefit of the State.'

'Article VII. SECTION 8. (1942 antidiversion amendment.) All motor vehicle registration fees and all licenses and excise taxes on motor vehicle fuel, except cost of administration, shall be used exclusively for the construction, maintenance and supervision of the public highways exclusively within the state or for the payment of bonds issued or to be issued for the construction of such public highways and the payment of interest on such bonds.'

The questions presented by this appeal are (1) Does the reimbursement of the cost of relocation of facilities to the utilities constitute a gratuity, is it the loaning of the credit of the state, or the assumption of a liability of another? and (2) Is the relocation of utility facilities a part of the construction of a public highway as the word 'construction' is used in the antidiversion amendment?

These questions in relation to the federal highway program, have been passed on by a number of state supreme courts. The views expressed differ from court to court and among members of the same court. The following cases answer question (1) above in the negative, and hold the legislation constitutional: Opinion of the Justices, (1957) 152 Me. 449, 132 A.2d 440; Opinion of the Justices, (1957) 101 N.H. 527, 132 A.2d 613; Minneapolis Gas Company v. Zimmerman, (1958) 253 Minn. 164, 91 N.W.2d 642; Northwestern Bell Telephone Co. v. Wentz, (N.D.1960) 103 N.W.2d 245; State v. City of Austin (State v. City of Dallas), (1960) 160 Tex. 348, 331 S.W.2d 737; State Road Commission of Utah v. Utah Power & Light Company, (1960) 10 Utah 2d 333, 353 P.2d 171; Jones v. Burns, (Mont.1960) 357 P.2d 22; State Highway Department v. Delaware Power & Light Company, (Del.1961) 167 A.2d 27; and State v. Lavender, (1961) 69 N.M. 220, 365 P.2d 652. The following are contra: State v. Southern Bell Telephone & Telegraph Company, (1958) 204 Tenn. 207, 319 S.W.2d 90; State ex rel. Rich v. Idaho Power Company, (1959) 81 Idaho 487, 346 P.2d 596; and Washington State Highway Commission v. Pacific Northwestern Bell Telephone Company, (Wash.1961) 367 P.2d 605.

The following cases answer question (2) in the affirmative holding the legislation constitutional: Opinion of the Justices, 101 N.H. 527, 132 A.2d 613; Minneapolis Gas Company v. Zimmerman, supra; Northwestern Bell Telephone Co. v. Wentz, supra; State v. City of Austin, supra; and Jones v. Burns, supra. The following are contra: Opinion of the Justices, 152 Me. 449, 132 A.2d 440; State ex rel. Rich v. Idaho Power Company, supra; Washington State Highway Commission v. Pacific Northwestern Bell Telephone Company, supra; Mulkey v. Quillian, 213 Ga. 507, 100 S.E.2d 268; and see Annotation, 75 A.L.R.2d 419.

I. Plaintiffs recognize there is no presumption of invalidity of a statute and the burden is upon them to establish there is no reasonable state of facts which will support the statute. Diamond Auto Sales, Inc. v. Erbe, 251 Iowa 1330, 1335, 105 N.W.2d 650, 652, and citations. All parties concede public utilities have the right to use highway rights of way and the General Assembly can regulate such use and require relocation of facilities at the cost of the utilities. Chapters 320, 488, and 489, Code of Iowa, 1958, I.C.A.

II. That section 1 of article VII and section 3 of article VIII of the Iowa Constitution refer to secondary indebtedness, i. e., becoming surety for the debt of another, has been determined in Merchants' Union Barb Wire Co. v. Brown, 64 Iowa 275, 20 N.W. 434, and Grout v. Kendall, 195 Iowa 467, 192 N.W. 529. The holding in these cases is in accord with the plain language of the Constitution.

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